Most young companies trying to grow focus on boosting sales. They also focus on acquiring new customers, extending...
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into new markets, hiring experienced sales reps and creating teams with distinct responsibilities.
But according to experienced sales managers at fast-growing startups like Dropbox, particularly at businesses with software as a service (SaaS), these tactics are precisely the wrong ways to make sales soar at a small company. These myths of sales management strategy are prevalent, said Armando Mann, Salesforce vice president of sales and customer success, at a Dreamforce 2016 session on lessons learned from his startup days.
"The myth that I always would hear is that growth comes from selling to a lot of customers," Mann said. He helped grow sales for Google's Emerging Businesses team, Dropbox for Business and RelateIQ (now SalesforceIQ).
According to Mann, younger companies also have different requirements for sales success. In the session at Dreamforce, he outlined some common myths in sales management strategy and the realities that newer companies should understand.
Myth one: New customers create growth. The myth is, "Always be closing, [and] if you're always capturing customers, the better you're going to do. But that's not true. That's not the way to grow," he said.
Reality: Newer companies are constantly chasing new accounts, Mann explained. But, in fact, they do better when they continue to cultivate their existing accounts. He described a scenario in which his company boosted account retention from 75% to 95%. "The way to grow is to keep those customers -- especially in a SaaS business," he said.
Armando MannVP of sales and customer success, Salesforce
Increasing success with existing customers requires a certain restructuring of traditional sales management strategies. That includes investing more in simultaneous post-sales compensation of account executives and customer service managers to ensure that existing accounts are taken care of and results are constantly measured. This also creates more of a teamwork approach to cultivating customers.
Myth two: Growth comes from expanding sales territory to new geographic areas.
Reality: Narrow your geographic territory rather than try to gain customers everywhere. "You want to define your market in such a narrow way that you know you can win," Mann said. "You know you have a beachhead, so … you have to hone your employment plans, marketing [and] your message so that it works," he said.
Myth three: Hire account executives with a proven track record.
Reality: Mann said companies become enamored with certain resumes and candidates with experience, but those hires aren't necessarily well-suited to the company. "That's the worst hire you will probably make," Mann said. "That person doesn't have the skills for your growth stage." Mann said.
Hire for the right skill set for your stage of company and choose less-experienced account representatives that are "scrappy," assertive and resourceful. Hire and organize for flexibility and speed as the companies grows, Mann said.
Myth four: Sales benefits from distinct teams.
Reality: Mann said that while companies often try to create distinct roles, with sales development teams, account teams and post-sales customer service representatives, for example. But a blended team works better.
"That [separation] works on a factory-assembly line, but it doesn't work best in sales," Mann said. "There is a lot of benefit of doing that: It changes communication violently; you're not updating each other over email. You're turning around and having a conversation right there when you're on the phone with a customer. You can finish each other's phrases."
Busting these traditional sales management strategy myths can help companies focus on their strengths rather than try to do everything all at once. While Mann's advice is unconventional, his tailored approach to helping companies grow at the early stages of their development may help companies boost sales as they grow.
For more, check out our Dreamforce 2016 conference coverage.
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